Global 100 crowns Statoil, underscoring the other legs of sustainability

At the top of this year's Global 100 is Norwegian energy giant Statoil (NYSE: STO). The Global 100, published by Corporate Knights, ranks the top 100 public corporations which have been most proactive in managing  environmental, social and governance issues. I know what you're thinking. How could a traditional energy company — in fact, the world's largest offshore oil and gas company — be ranked at the top of a list of the world's most sustainable corporations? At least that's what I was thinking (or that I'm going to say I was thinking for the sake of argument).

The key word here is sustainable and the key operation is how "sustainable" is defined and measured.

In this case, it seems Statoil's position was buoyed by its performance in the social and governance categories. Statoil ranked second overall in percentage of female board of directors.

Statoil also performed well because environmental performance is measured in terms of natural resource consumed or waste expelled per $ of output.

Therefore, despite the fact Statoil makes money by developing oil and gas, which is unsustainable by definition, this methodology does not penalize Statoil's sustainability rating.

Other sustainability indicators looked at by The Global 100 judges include a sustainability-pay link (whether or not at least one senior officer has his/her pay linked to sustainability), transparency and the compensation disparity between the highest and lowest-paid employees.

It is no coincidence that eight of the top ten corporations in the 2011 Global 100 are European or that Scandinavian countries seem to produce countries with strong sustainability performance ratings. Corporations in Europe are more heavily regulated than those in North America and Asia, and a culture of corporatism means that the state works closely with corporations, labor and environmental interests to formulate policy.

lntel and Johnson & Johnson are the only non-European countries in the Global 100 top ten, both of which are based in the U.S.

But to say that Statoil was put at the top of the Global 100 purely based on its social and governance practices would not be entirely accurate.

Using its position as an oil and gas leader, Norway is investing heavily in renewable energy. And Statoil, formerly StatoilHydro, happens to be two-thirds-owned by the Norwegian state. As a result, Statoil is one of the prime outlets for the Norwegian government's renewables push, researching and investing in deepwater offshore wind energy projects, namely the 2.3-megawatt HyWind floating offshore wind turbine, the world's first commercial scale floating wind turbine.

Reprinted with permission from Earth & Industry